Innovate (VATE) risk factors, FY2024 10-K

Risks Related to Our Businesses

1. 01To service our indebtedness and other obligations, we will require a significant amount of cash
2. 02Substantial doubt about our ability to continue as a going concern
3. 03The agreements governing our indebtedness and the Certificates of Designation for our outstanding shares of preferred stock contain, and any of our other future financing agreements may contain, covenants imposing operating and financial restrictions on our businesses
4. 04We have significant indebtedness and other financing arrangements and could incur additional indebtedness and other obligations, which could adversely affect our business and financial condition
5. 05Loss of our key management or other personnel, including the 2023 unexpected passing of our Chief Executive Officer, President and Director, could adversely impact our business
6. 06We and our subsidiaries may not be able to attract and/or retain additional skilled personnel
7. 07We may identify material weaknesses in our internal control over financial reporting which could adversely affect our ability to report our financial condition and results of operations in a timely and accurate manner
8. 08Overall tightening of the labor market increases in labor costs or any possible labor unrest may adversely affect our business and results of operations
9. 09Fluctuations in the exchange rate of the U.S. dollar, foreign currencies and inflation may adversely impact our results of operations and financial condition
10. 10Our failure to meet the continued listing requirements of NYSE could result in a delisting of our securities, which in turn could adversely affect our financial condition and the market for our common stock
11. 11Future acquisitions or business opportunities could involve unknown risks that could harm our business and adversely affect our financial condition and results of operations
12. 12We may not be able to successfully integrate acquisitions into our business, or realize the anticipated benefits of these acquisitions
13. 13We rely on information systems to conduct our businesses, and failure to protect these systems against security breaches and otherwise to implement, integrate, upgrade and maintain such systems in working order could have a material adverse effect on our results of operations, cash flows or financial condition
14. 14We may increase our operational size in the future, and may experience difficulties in managing growth
15. 15We may not be able to fully utilize our net operating loss and other tax carryforwards
16. 16We may experience ownership changes in the future as a result of subsequent shifts in our common stock ownership, some of which may be outside of our control. If the Company were to experience an ownership change as defined in Code Section 382, its ability to utilize these tax attributes would be substantially limited
17. 17We may be required to restate certain of our financial statements in the future, which may lead to additional risks and uncertainties, including stockholder litigation and loss of investor confidence
18. 18Our officers, directors, stockholders and their respective affiliates may have a pecuniary interest in certain transactions in which we are involved, and may also compete with us
19. 19We may suffer adverse consequences if we are deemed an investment company and we may incur significant costs to avoid investment company status
20. 20We are subject to litigation in respect of which we are unable to accurately assess our level of exposure and which, if adversely determined, may have a material adverse effect on our financial condition and results of operations
21. 21Deterioration of global economic conditions could adversely affect our business
22. 22Climate change may have an impact on our business
23. 23We are subject to risks associated with our international operations
24. 24If we are unable to adequately address these risks, we could lose our ability to operate in certain international markets and our business, financial condition or results of operations could be materially adversely affected
25. 25In pursuing our corporate strategy, we may acquire, dispose of or exit businesses or reorganize existing investments. The success of this strategy is dependent upon our ability to identify appropriate opportunities, negotiate transactions on favorable terms and ultimately complete such transactions
26. 26If we dispose of or otherwise exit certain businesses, there can be no assurance that we will not incur certain disposition related charges, or that we will be able to reduce overhead related to the divested assets
27. 27Our development stage companies may never produce revenues or income
28. 28We could consume resources in researching acquisitions, business opportunities or financings and capital market transactions that are not consummated, which could materially adversely affect subsequent attempts to locate and acquire or invest in another business
29. 29There may be tax consequences associated with our acquisition, investment, holding and disposition of target companies and assets
30. 30Our participation in any future joint investment could be adversely affected by our lack of sole decision-making authority, our reliance on a partner’s financial condition and disputes between us and the relevant partners
31. 31We and our subsidiaries rely on trademark, copyright, trade secret, contractual restrictions and patent rights to protect our intellectual property and proprietary rights and if these rights are impaired, then our ability to generate revenue and our competitive position may be harmed
32. 32Our certificate of incorporation, as amended, authorizes the issuance of up to 250,000,000 shares of common stock and 20,000,000 shares of preferred stock
33. 33Conversion of the 2026 Convertible Notes will dilute the ownership interest of existing stockholders, including holders who had previously converted their Convertible Notes, or may otherwise depress the market price of our common stock
34. 34As of December 31, 2024, the holders of our outstanding Series A-3 Preferred Stock and Series A-4 Preferred Stock had certain rights to convert their preferred stock into 549,884 shares of our common stock
35. 35Price fluctuations in our common stock could result from general market and economic conditions and a variety of other factors
36. 36Delaware law and our charter documents contain provisions that could discourage or prevent a potential takeover, even if such a transaction would be beneficial to our stockholders
37. 37We are subject to the provisions of Section 203 of the Delaware General Corporation Law which limit the right of a corporation to engage in a business combination with a holder of 15 percent or more of the corporation’s outstanding voting securities, or certain affiliated persons
38. 38Bank failures or other similar events could adversely affect our and our customers' and vendors' liquidity and financial performance
39. 39Increased adoption of artificial intelligence and government regulation could create additional costs

Risks Related to the Infrastructure segment

1. 40DBMG’s business is dependent upon major construction contracts, the unpredictable timing of which may result in significant fluctuations in its cash flow due to the timing of receipt of payment under such contracts
2. 41The nature of DBMG’s primary contracting terms for its contracts, including fixed-price and cost-plus pricing, could have a material adverse effect on DBMG’s results of operations, cash flows or financial condition
3. 42DBMG’s billed and unbilled revenue may be exposed to potential risk if a project is terminated or canceled or if DBMG’s customers encounter financial difficulties
4. 43DBMG’s failure to meet contractual schedule or performance requirements could have a material adverse effect on DBMG’s results of operations, cash flows or financial condition
5. 44DBMG’s government contracts may be subject to modification or termination, which could have a material adverse effect on DBMG’s results of operations, cash flows or financial condition
6. 45DBMG is exposed to potential risks and uncertainties associated with its reliance on subcontractors and third-party vendors to execute certain projects
7. 46Persistent inflation and economic uncertainty may negatively impact DBMG's business
8. 47Any increase in the price of, or change in supply and demand for, the steel and steel components that DBMG utilizes to complete projects could have a material adverse effect on DBMG’s results of operations, cash flows or financial condition
9. 48DBMG’s dependence on suppliers of steel and steel components makes it vulnerable to a disruption in the supply of its products
10. 49Intense competition in the markets DBMG serves could reduce DBMG’s market share and earnings
11. 50DBMG’s customers’ ability to receive the applicable regulatory and environmental approvals for projects and the timeliness of those approvals could adversely affect DBMG’s business
12. 51DBMG’s failure to obtain or maintain required licenses may adversely affect its business
13. 52Volatility in equity and credit markets could adversely impact DBMG due to its impact on the availability of funding for DBMG’s customers, suppliers and subcontractors
14. 53DBMG’s business may be adversely affected by bonding and letter of credit capacity
15. 54DBMG is vulnerable to significant fluctuations in its liquidity that may vary substantially over time
16. 55DBMG’s projects expose it to potential professional liability, product liability, warranty and other claims
17. 56DBMG is subject to environmental laws and regulations, including those concerning emissions into the air, discharge into waterways, generation, storage, handling, treatment and disposal of waste materials and health and safety
18. 57Additionally, the adoption and implementation of any new regulations imposing reporting obligations on, or limiting emissions of greenhouse gases from, DBMG’s customers’ equipment and operations could significantly impact demand for DBMG’s services, particularly among its customers for industrial facilities
19. 58DBMG is and will likely continue to be involved in litigation that could have a material adverse effect on DBMG’s results of operations, cash flows or financial condition
20. 59Work stoppages, union negotiations and other labor problems could adversely affect DBMG’s business
21. 60DBMG’s employees work on projects that are inherently dangerous, and a failure to maintain a safe work site could result in significant losses

Risks Related to the Life Sciences segment

1. 61Pansend’s operating results may fluctuate significantly, which makes its future operating results difficult to predict and could cause its operating results to fall below expectations
2. 62Pansend operates in a highly competitive market, and may face competition from large, well-established medical technology, device and product manufacturers with significant resources, and may not be able to compete effectively
3. 63A disruption in our operations could materially and adversely affect our business
4. 64Pansend currently has not generated significant product revenue and may never become profitable
5. 65We may not be able to successfully implement our growth strategy and we may be unable to grow our business effectively or efficiently, which would harm our business, financial condition and results of operations
6. 66R2 Technologies' success depends upon customer demand and patient satisfaction with its procedures
7. 67Demand for our products may not increase as rapidly as we anticipate due to a variety of factors, including a weakness in general economic conditions and resistance to non-traditional treatment methods
8. 68Pansend’s failure to obtain or maintain necessary FDA clearances and approvals, or to maintain continued clearances, or equivalents thereof in the U.S. and relevant foreign markets, could hurt its ability to distribute and market its products
9. 69Pansend’s customers, or physicians, aestheticians and technicians, as the case may be, may misuse certain of its products, and product liability lawsuits and other damages imposed on Pansend may have a material adverse impact on its business
10. 70If we fail to manage our inventory effectively, our results of operations, financial condition and liquidity may be materially and adversely affected
11. 71There is a limited talent pool of experienced professionals in the life sciences industry. If Pansend is not able to retain and recruit personnel with the requisite technical skills, it may be unable to successfully execute Pansend’s business strategy
12. 72Rapidly changing technology in life sciences could make the products Pansend is developing obsolete
13. 73If Pansend is unable to effectively protect its intellectual property, it may not be able to operate its business, and third parties may be able to use and profit from its technology, both of which would impair Pansend’s ability to be competitive
14. 74If third parties make claims of intellectual property infringement against Pansend, or otherwise seek to establish their intellectual property rights equal or superior to Pansend’s, it may have to spend time and money in response and potentially discontinue certain of Pansend’s operations

Risks related to the Spectrum segment

1. 75Our broadcasting business operates in highly competitive markets and our ability to maintain market share and generate operating revenues depends on how effectively we compete with existing and new competition
2. 76The FCC could implement regulations or the U.S. Congress could adopt legislation that might have a significant impact on the operations of the stations we own and the stations we provide services to or the television broadcasting industry as a whole
3. 77Continued uncertain financial and economic conditions may have an adverse impact on our business, results of operations or financial condition
4. 78Certain stations are also benefiting from our retransmission consent agreements with multichannel video programming distributors ("MVPDs"), and we cannot predict the outcome of potential regulatory changes to the retransmission consent regime